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Select Comfort Records Q4 Profit on Big Sales Gain

Bedding manufacturer and retailer Select Comfort (NASDAQ: SCSS) reported a fourth-quarter profit of $11.3 million or 25 cents per share, reversing a net loss from a disastrous fourth quarter in the prior year, when a new enterprise resource planning system led to lost sales and canceled orders.

The company, which makes the Sleep Number airbed, said fourth-quarter sales totaled $313.4 million, up 46% from $214.7 million in the previous year’s fourth quarter. Same-store sales at its company-owned retail stores leaped 34%.

But despite the huge fourth-quarter sales gain, the total from the most recent quarter didn’t top the fourth quarter of 2014, when sales totaled $322.2 million.

“While our fourth quarter sales and earnings were below our expectations, we begin 2017 well positioned to accelerate earnings growth, cash generation and returns to shareholders.,” said Shelly Ibach, president and CEO. “Thus far in 2017, traffic and sales are on target, which we attribute to a steadier consumer environment and improved marketing effectiveness.

“All of the investments we have made over the past five years are coming together with the roll out of our revolutionary new Sleep Number 360 smart beds, which will enable both continued market share growth and greater business leverage.”

For the 12 months ended Dec. 31, sales rose 8% to a record $1.31 billion, including a 1% jump in comparable-store sales.

Full-year profits totaled $51.4 million or $1.10 per share. That was up from $50.5 million or 97 cents per share the previous year.

Select Comfort said 91% of its sales came from company-owned retail stores, and said the average sales per store totaled $2.36 million.

For 2017, the company is projecting earnings per share of $1.20 to $1.40, including one-time costs of 15 cents to 22 cents per share for the rollout of the smart bed and the redesign of its logistics network.

The company said its projecting sales growth in the mid- to high single-digits and a 3% to 4% increase in its store count.

The company ended 2016 with 540 stores, a net gain of 52 from the previous year.



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